Overview 

Japan Cloud Market Size (Billion USD) 

(Market Size = Local Production + Imports – Exports) 

Units: USD $ Billions 

Source: MM Research Institute 

Japan’s domestic cloud market maintains high growth because of the ongoing system migration from on-premise to cloud-based systems and accelerated demand for cloud-oriented systems.  Ongoing COVID-19 health measures in Japan have accelerated the country’s transition to cloud computing because of new working styles and increased reliance on technology, increased remote communications, and higher rates of network system maintenance.  Japan’s cloud-first business strategy has been rapidly implemented into Japanese enterprises and has created more stable growth in the cloud market. 

Japan’s MM Research Institute announced that the market size of Japan’s domestic cloud market in 2021 was USD $32.53 billion.  An important factor in the sustained growth of Japan’s domestic cloud market has been Japan’s accelerated Digital Transformation (“DX”) initiative.  Because many Japanese companies had already started transitioning to cloud-based information and communications technology (“ICT”) under the DX initiative, they were able to more quickly realize enhanced service vendor capabilities. 

Leading Sub-Sectors  

One of the main sub-sectors for cloud computing is Infrastructure as a Service (“IaaS”).  The U.S. Department of Commerce’s National Institute of Standards and Technology (“NIST”) defines IaaS as follows: 

The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, and deployed applications; and possibly limited control of select networking components (e.g., host firewalls). 

According to MM Research Institute data, the top three IaaS providers in Japan in 2022 were Amazon Web Services (“AWS”), Microsoft Azure, and Google Cloud (“GCP”).   

Opportunities 

In Japan, the business case for enterprises moving to cloud infrastructures is supported by several factors.  First, cloud infrastructure does not require a large capital investment.  Second, cloud computing can easily be scaled to each company’s IT system.  Third and finally, cloud computing has become an indispensable service for infrastructure construction in Japan. 

The Government of Japan’s Digital Agency promotes the utilization of cloud services for both central government and local government offices.  For instance, the Digital Agency announced in October 2022 that Government of Japan agencies would adopt “Government Cloud” services for the fiscal year.  These newly adopted cloud services are provided by Amazon Web Services, Google Cloud Platform, Microsoft Azure, and Oracle. 

The Digital Agency’s FY2022 solicited cloud services will be used in two Digital Agency programs: (1) verifying the installation of electronic certificate functions of smartphone My Number cards; and (2) the research and study of both the deployment of digital collaboration infrastructure and data analysis infrastructure.  These programs will continue to enhance opportunities for U.S. cloud companies in Japan.  

Resources 

Government of Japan Agencies 

Digital Agency  

Organizations 

The American Chamber of Commerce in Japan (“ACCJ”) / ACCJ Digital Economy Committee  

Recent Japan Cloud Computing Events 

CEATEC 2022  

October 19-22, 2022 

Commercial Service Japan (“CS Japan”) organized the U.S. pavilion at CEATEC 2022, one of the biggest Internet of Things (“IoT”) trade shows in Japan.  CS Japan will continue to recruit U.S. technology companies to participate as exhibitors for future CEATEC trade shows. 

Japan IT Week, Tokyo 
October 26-28, 2022 at Makuhari Messe 

Commercial Service Japan  

For additional information about Japan’s cloud computing business sector, please contact Commercial Service Japan (“CS Japan”) at  Office.Tokyo@trade.gov or Ms. Atsuko Shimada at Atsuko.Shimada@trade.gov.